Introduction To Accounting Final Financial Multiple Choice

Debt to Capital – Total Interest Bearing Debt/(Total Interest Bearing Debt+Owners' Equity
acid-test ratio and what it shows – quick assets / current liabilities

détermines liquidity of the company

batch report – A report of credit card sales produced by a point-of-sale terminal
Solvency Ratios – "long term"
debt to equity ratio
times interest earned ratio
return on the market value of equity – net income divided by the market value of equity
Invoice – A form describing the goods or services sold, the quantity, and the price
Participatory Expenditure Tracking (PETS) – This is a tool for tracking how public resources are actually used by following the money through the budget distribution process to the final place where it is spent. It is a powerful tool for discovering mistakes and irregularities in the way public money is spent and can also be used to show whether budgets are sufficient to begin with.
Financial Statements – Financial reports that summarize the financial condition and operations of a business
cost object – anything for which cost data are desired. examples of cost objects are products, customers, jobs and parts of the organization such as departments or divisions (p43)
Manager can improve employee evaluations with team conversations and coaching.
Definition of Expenses – Expenses is an outflow of economic benefit (or decrease in inflow) in the form of an decrease in assets (or increase in liabilities) that decreases owners equity (expect for drawings)
Expenses is recorded in Cash Payment Journal.
(Cash paid for any item for running the business that cannot be reused)
Expenses includes Advertising, Supplies (of stock), Interest Paid, Petrol, Wages, Electricity, Insurance, Telephone, Materials, Office Expenses, Repairs, Cleaning, Postage, Delivery Expenses, Interest on Loan, Bills.
Expect from Drawings, Mortgages, GST Paid, Creditor repayment, repayment of loan, cash drawings.
HISTORICAL COST PRINCIPLE – Goodwill is recorded only at time of purchase.
Direct Method – For preparing the operating activities section of the statement of cash flows, the approach in which cash receipts and cash payments are reported.
income statement? – gives company's revenues and expenses and net income over a period of time due to earning activities.
Depreciation expense

Annual depriciation expense – Gradually reduces the net book value of an asset

Cost of the asset – scrap value aka salvage value / its useful life

Sources of financial information: – Valuing assets at historical cost
Revenue recognition rule
Accounting for transactions only
Mаnаger cаn imprоve emplоyee evaluatiоns with team conversations and coaching.
Stockholders Equity increases when.. – Owners investments and Net income in the period
What side of the journal entry are Cash Dividends recorded on when a company declares a cash dividend? – Debit
a. – Acid Test Ratio: reflects the liquidity of a company.
Which term refers to the allocation of the cost of an asset over the asset's useful life? – depreciation
write-down – total cost – LCM valuation

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